Hat tip: Cathy O’Neil (via mathbabe.org)
Business litigation is often like the game of poker. For example, when deciding whether to settle or go to trial, a plaintiff must decide whether to invest more money in his or her case in order to secure a possible payout or risk losing the case altogether. At the same time, many successful companies with “deep pockets” are often tempting legal targets for plaintiffs’ lawyers. Facebook is no exception. Soon after its founding in 2004, Facebook faced multiple lawsuits in State and federal courts, including a federal lawsuit brought by ConnectU (the Winklevoss twins’ competing social network site) as well as several State-law claims brought by one of Facebook’s co-founders, Eduardo Saverin. But as we have seen in several previous lessons, a strong case can be made that Mark Zuckerberg really did create “thefacebook” without stealing anyone’s intellectual property, while Eduardo arguably breached his fiduciary duty to Facebook when he froze the company’s bank account in July of 2004. So, why do you think Facebook eventually decided to settle its legal claims with ConnectU and Eduardo, instead of going to trial?
In the meantime, consider this hypothetical conversation between Mark and “Marylin”–a fictional associate at Facebook’s law firm who specializes in voir dire, or jury selection–an exchange which appears in Aaron Sorkin’s screenplay for “The Social Network,” the movie version of Accidental Billionaires:
MARYLIN
I’ve been licensed to practice law for all of 20 months and I could get a jury to believe you planted the story about Eduardo and the chicken. Watch what else. Why weren’t you at Sean’s sorority party that night?
MARK
You think I’m the one who called the police?
MARYLIN
Doesn’t matter. I asked the question and now everybody’s thinking about it. You’ve lost your jury in the first 10 minutes.
That is the title of our 2012 paper in which we (a) discuss three lessons from the film “The Battle of Algiers” and (b) model conflicts between terrorist groups and counter-insurgent forces as an evolutionary arms race. We will blog more about our approach to conflict in the days ahead.
Have you ever seen a planet-shaped cake? Neither have we! Thanks to MahirFR (via reddit).
“Welders make more [income] than philosophers. We need more welders and less philosophers.“–Marco Rubio (Nov. 10, 2012)
In fairness to Marco Rubio, who we greatly admire, he is making a more general point about the merits of vocational education, but unfortunately, his core argument (i.e. we need to send more students into vocational training) is riddled with theoretical and empirical fallacies, starting with the “labor theory of value” fallacy. First of all, it is the market (i.e. supply and demand), not the inherent worth of one’s products or services, that determines how much one’s labor is worth. (This is why pro-athletes earn much more money than both welders and philosophers do.) Therefore, if the government were to subsidize welding school or take other measures to increase the number of welders, the wages of welders would go down, all other things being equal! Secondly, and perhaps most importantly, philosophy majors actually earn a higher level of annual income on average than welders do, as Faria Chideya explains in this short essay. So, if you don’t like books, go ahead and learn a trade (or play sports), but remember, market forces will determine your wages, not Senator Rubio.
As we mentioned in our previous post, Eric Schneiderman, the Attorney General of New York, recently sent a “cease-and-desist” letter to DraftKings and FanDuel, ordering them to stop taking wagers from New York residents. Both firms have responded that they will fight this action in court, but will they win? Our friend and colleague, law professor Marc Edelman, has written up a comprehensive survey of the major legal risks in the Daily Fantasy Sports industry. (Check out some of his research in the area of sports law here.) In brief, state courts in New York have used a “material element” test to determine whether a particular contest is an illegal game of chance. This test, however, confers a high degree of discretion to the courts. In the words of Prof. Edelman, “it is possible for a court to find a contest is not determined by skill even if one can prove mathematically that the contest is 51% or more skill.” (See Edelman, in press, p. 24, footnote omitted.) So, how will this legal battle play out? Your guess is as good as ours …
Dear Sir:
In your eloquent and well-reasoned cease-and-desist letter to DraftKings dated Nov. 10, 2015, you conclude that “Daily Fantasy Sports” is a form of illegal gambling under New York law. Specifically, you assert that “DraftKings has promoted … DFS [Daily Fantasy Sports] like a lottery” and that DFS is dangerous because of “the quick rate of play, the large jackpots, and the false perception that it is eminently winnable.” Accordingly, you “demand DraftKings cease and desist from illegally accepting wagers in New York State as part of its DFS contests.”
We write to commend your public service and your tireless efforts to protect the good citizens of New York from gambling the New York Lottery from unfair competition. After all, New Yorkers already have a wide variety of attractive [and legal] options for gambling at their ready disposal (the aforementioned New York Lottery). Moreover, the New York Lottery is certainly not as dangerous to the public as Daily Fantasy Sports are. Even though the New York Lottery (like DFS) offers substantial jackpots and creates false perceptions (see image below), it is operated by the state, so that’s okay. In short, unlike the crass commercial motives of the greedy and evil owners of DraftKings, the motives of the New York Lottery are pure and benevolent.
Again, thank you for protecting the citizens of New York and the New York Lottery from competition.
Yours truly,
Prior Probability
Ivy League sentences to ponder: “It is therefore remarkable that no fewer than 13 [Yale] administrators took scarce time to compose, circulate, and co-sign a letter advising adult students on how to dress for Halloween, a cause that misguided campus activists mistake for a social-justice priority.” Conor Friedersdorf, a staff writer at The Atlantic, reviews recent events at Yale in this excellent essay.
Addendum (Nov. 13, 2015): “The upshot of this all is that lower tier administrators will be sending fewer all-student emails in the future … I’m not sure that’s a bad thing.” (Via Tyler Cowen, master of the Internet.)
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